10/10/2019 0 Comment

Aggregator Model: Opportunity or Bargain?

Being in an on-demand service sector, you must be so much inspired by the working aggregator models of the legendary Uber, Ola, Grofers, Uber Eat, Make My Trip, and others. Aggregator business model has made its place in about every industry. The model is also called an on-demand delivery model or Uber for the X model. It is a model that is known to organize the workflow of the populated sectors such as the hotel industry, taxi on demand, food on demand, or any other service-based business model.  

Aggregator Model for Business

The aggregator model is a type of network model where a firm collects data about a good or service provider and makes the provider partner. It sells its services under the aggregator brand name and earns profit through margins with each successful service provision. 

As a brand, they have the power to regulate the quality and price of the services. Uber is one of the most significant examples of this type of business model. The deal is sealed with a contract between the seller and the brand. It doesn’t mean the seller becomes a part of the brand; they are still individual owners of their business. The Aggregator helps them get more business through their platform. 

Characteristics of Aggregators 

Customers: The model runs on the two-fold customer strategy where the service consumers and service providers act like the customer to the company. The brand becomes a platform for both parties. 

Industry:  All the service providers are from the same industry, and the Aggregator collect provides them all a well-organized platform under its brand name — for example, Airbnb, OYO, Uber. 

Partnership Model: The service providers are not the employees of the Aggregator; they act as a service partner to the business. The partners have their freedom to accept or reject the offer to provide the service. 

Brand: Branding is direly needed to Aggregator. A large part of the revenue is spent on marketing. A brand is required to work upon the quality and price band, as all the goods and services are provided under a single brand with different providers. The brand is the only point of contact for consumers. 

Quality: The Aggregator strives to provide a standardized quality to every user; they make sure the partners are providing the standard variety in products and services. 

Contract: A contract is built between the Aggregator and the goods or service provider, and every term is made clear in the same. The conditions help make the model work well for the service provider and Aggregator. The emphasis on the quality of the product and service to the customers and the Aggregator focus on marketing and creating more leads for the partners. 

The terms and conditions encompass around: 

  • Marketing terms
  • Quality Standards
  • Commission or Take-up Rate(Differs for each industry)  
  • Other important terms to regulate price and work policies. 

Aggregator Model for Revenue 

  • The model works to provide a win-win situation for the service provider and the Aggregator, the Aggregator provides business to the partners and in return charge commission.
  • Another way of revenue generation is to take-up rates. A partner quotes the minimum price at which they will be operating with the Aggregator, inclusive of the take-up rate. They quote the final cost to the consumers. 

Related Article: Emergence and Acceptance of Progressive Web Applications

Wrapping Up

Aggregator model is built to sublime the complexities of the on-demand industry. It organizes the working and provides acute transparency in operations for both the consumers and service providers. While looking forward to creating a business out of any on-demand service you can get benefitted by keeping the following things in mind. 

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